Analyst: 100G fueling resurgence in optical network spending

The optical networks (ON) market will exceed $17.5 billion by 2018, at a 3.1 percent CAGR from 2012, predicts the global technology analyst firm Ovum. An exceptionally strong 2Q13 in the market signals the beginning of a spending bounce-back, says the analyst; 2Q13 was reportedly the strongest quarter in the last six and was the 7th highest quarter in the last 10 years.

“Ovum’s 9.1 percent growth projection for North American ON sales in 2013 signals a solid bounce-back year after two years of non-growth,” comments Ian Redpath, analyst for network infrastructure at Ovum and author of the forecast. “Network core investments are resuming and 100G is being deployed in volumes. The North American tier-1 communications service providers (CSPs) and cable operators are investing in their core network to support all traffic types. ”

The major technology trend for the new forecast is the ascendancy of 100G, whose revenues exceeded 40G sales for the first time in 2Q13, according to Ovum. “Nearly all new large-scale, long-haul optical networks designed and deployed today will be 100G," adds Ovum's Redpath. "100G has assumed the lead position and will not yield within our forecast period."

Redpath further explains, "Two positive market trends are emerging at the same time. The first is a need for the CSPs to refresh network technology after a long period of running core networks hotter and delaying investment. The second major trend is the maturity of 100G technology to the point where CSPs have begun deployments at scale. 100G is in the right spot at the right time,” concludes the analyst.